Implications of Strategic Management Theory

Macroeconomic theory assumes that factors of production in the economy are homogeneous and fungible. As a result, it may be ill-suited for developing policy responses to the recent financial crisis. Theories of strategic management and organization, with their emphasis on heterogeneously distributed resources and capabilities, may be better positioned. Examples of where macroeconomic theory may lead policies astray, and where theories of strategic management may be more appropriate, are provided

Evolutionary trends of industry variables

The paper offers empirical evidence on the evolutionary trends of industry variables. It investigates the time path of patents, product price and quantity, and number of firms from the first introduction of a product to maturity of the market. The paper extends earlier work by Gort and Klepper by expanding the data on products through 1991, and augmenting it with new products and new data sources. The reexamination of the aging patterns reveal the Gort and Klepper results to be robust. The time trends follow the expected patterns with remarkable consistency and are strongly significant for most products. New evidence on patenting activity reveal an eventual decline in technological activity over the later years of the product market life-cycle. © 1998 Elsevier Science B.V

Technological Activity And Survival Of Firms

The paper presents new evidence on the effect of technological activity on the post-entry performance of firms. By comparing firm survival across technical and non-technical products and over stages of differing technological activity, it attempts to resolve two seemingly contradictory hypotheses: that uncertainty inherent in high technological activity reduces the probability of survival and that technological activity increases the probability of entrant survival. The empirical results, in the context of the product life-cycle framework, show that entering firms enjoy a higher probability of survival in stages of high technological activity, and in products that are more technical in nature. However, the hazard function - the probability of failure conditional on age - is higher for technical products, reflecting the adverse effects of technical uncertainty and obsolescence of incumbent knowledge

Small Firm Survival and Technological Activity

The paper investigates the post entry performance of small firms competing under different technological environments. Small firm survival is compared over technical and non-technical products and over stages of differing technological activity. The empirical results, in the context of the product life-cycle framework, show that small firms enjoy a higher probability of survival in stages of high technological activity, and in products that are more technical in nature. Technological activity is also seen to affect the shape of the hazard rate function, implying that the relation between technological activity, age and small firm survival may be complex